La’s Opportunity Zones: A “Missed Opportunity” to Strengthen Healthcare, Research and Innovation in
Whether you agreed or disagreed with the 2017 Tax Cuts and Jobs Act adopted by congress, it is hard to find a local leader or state governor balk at the provisions that established Opportunity Zones (O-Zones) to encourage private investment. If utilized correctly, the program will help attract private investors to spur job creation and have other positive economic gains in historically distressed census tracts throughout the country.
Last week Governor John Bel Edwards and Louisiana Economic Development released Louisiana’s designated census tracts to be submitted for “O-Zone” designation. Of Louisiana’s 150 tracts that were designated, Caddo Parish is fortunate to have seven tracts for potential designation. To my surprise, not included on this list is Census Tract 217 which consists of the LSUHSC-Shreveport, University Health/ Ochsner, and the Biomedical Research Foundation and Willis Knighton corridor. While I am thankful for the tracts that we did receive, excluding the medical coordinator is an opportunity missed. Like many I believe North Louisiana’s greatest immovable assets and intellectual capital is found on Kings Highway. Designating our medical corridor as an Opportunity Zone has the potential to be a game changer in helping our region strengthen and bolster these assets in a similar successful fashion as we have seen throughout the country. The economic multiplier for medical education and research has a higher and longer effect on economies.
Imagine investors working with LSU Med School to create a vibrant medical district with mixed-use and mixed-income amenities for its students, medical residents, physicians, and support staff. Complemented by pedestrian and bicycle paths, improved environmental friendly infrastructure, retail, and additional amenities the area could potentially evolve into a true midtown medical district. Imagine potential investors working Biomedical Research Foundation (which has dedicated tax millage), to repurpose and rehabilitate space around the corridor into research incubators, data facilities, and technology hubs where research and medicine are partnered with innovation and entrepreneurship. Designating this census tract would allow investors to live up to the recommendations of our 2030 Great Expectations Shreveport-Caddo Masterplan which specifically calls for a “revitalization program that encompasses the LSU Health and Willis-Knighton areas as a mixed-income, mixed-use neighborhood and employment hub and as an example of planning and public-private investment to create critical mass for revitalization success (Chapter 11).”
The benefit of investing in an “O-Zones” allows investors (who hold an estimated $2.3 trillion in underutilized capital gains in stocks and mutual funds) the ability to create Opportunity Funds (O- Funds) as long as 90 percent of the assets are invested within the designated areas qualified investment, federal capital gains taxes may be deferred the first five years; after that, taxes may be canceled on 10 percent of the original capital gains investment and deferred for the remainder. In year seven through year 10, taxes may be canceled on 15 percent of the original capital gains investment, and the remainder may be deferred through 2026. For investments lasting longer than 10 years, investors are exempt 100 percent from capital gains taxes, in addition to the other benefits for capital gains carried into the investment.
I ask that you join me in reaching out to Governor John Bel Edwards, Louisiana Department of Economic Development, and our legislative delegation to encourage them to consider amending Caddo’s initial designation to include our “Midtown Medical Corridor” in the states designation. The potential for job creation, community revitalization, infill development, and organic economic growth would truly achieve the intended outcomes of the program. Failure to do so is truly is another opportunity missed for our region and state.